Three men and a woman all aged in their 30s were arrested in a massive operation involving up to 100 officers as Revenue & Customs officials backed by police and Department of Work & Pensions staff swooped on properties in West Bromwich, Dudley, Tipton and Handsworth.

The move followed a nine-month undercover investigation into an alleged international tax credit and maternity allowance fraud. The scam is thought to have been masterminded from the Black Country and the synchronised dawn raids on eight addresses were intended to target its alleged ring leaders.

The racket involved people from an unnamed European country being brought to the UK where they are allowed to work.

Information and documentation acquired by them to help seek employment was then taken by the gang and used to make bogus benefits claims. The fraud is understood to have scooped £3.5m in false tax credits and £1.5m in illegal maternity benefits in around two years.

Adrian Farley, Assistant Director of Criminal Investigation for HMRC said: “We are investigating what we suspect is a major plot to rob the country of vast sums of public money by an organised crime gang.”